High rents, insecure work stressing out young Australians
Young Australians are increasingly struggling with the rising cost of living in Australia, with skyrocketing rents and insecure work affecting their ability to plan for their financial futures.
The Melbourne Institute for Applied Economic and Social Research’s monthly inflation gauge found that prices for household goods and consumer expenses had risen to 7.8 per cent in January 2023. Rents across the country also rose 15 per cent in 2022.
The costs of university and potential future employment are front of mind for Annabelle Evans and Sam McDougall.Credit:Jason South
“We have seen big increases in the price of rent, and because young people are more likely to be renters, there is a large housing-related cost of living burden on them,” says Associate Professor Sam Tsiaplias, who works on the gauge and cost of living research.
“People don’t know when the cash rate is going to stop going up, which creates uncertainty and some fear in the market,” he says. This fear is being internalised by young people who are attempting to establish financial stability and routines in their lives.
Mia Horsfall, 20, is a university student who recently struggled to find a place to live due to the pressure on Melbourne’s rental market.
She and her two housemates found while seeking a place to live in Melbourne’s inner north, they were competing against families and couples more than 10 years older than them, who had the financial means to offer above the asking price.
“We ended offering up on our rent because we were so worried about not finding a house at all,” Horsfall says. It was a difficult decision, which she says has had an impact on her budgeting.
“That $50 a week may not have meant much to the professionals with two stable incomes, but for young people with casual jobs it was a big deal,” she says. If her landlord were to raise her rent further, which is happening across Sydney and Melbourne, she wouldn’t have the savings or the ability to stay in her current house.
Like many other young Australians, Horsfall is employed in hospitality on a casual basis, where she has little consistency in her hours and income.
“One week I’ve got 45 hours, and the next it’s 10,” she says, and the disparity makes it impossible to budget and save money, and stops her from being able to commit to a second job.
Young Australians are often employed in casual jobs which makes budgeting difficult.Credit:Michele Mossop
Horsfall’s worries are not unique. A recent report by cashback app Cheddar and LEK Consulting found that the top issue for Gen-Z and Millennials is the cost of living and inflation, followed by housing prices and employment opportunities.
In 2022, 54 per cent of Gen Z and Millennials’ household income went to non-discretionary spending, 22 per cent went to savings and 24 per cent was spent on discretionary items and experiences.
The costs of university and potential future employment are front of mind for Annabelle Evans and Sam McDougall, who live in Parkville with three of their friends.
“The price of every subject is getting higher, and I’m building up so much HECS debt,” says Evans of her bachelor of arts degree at the University of Melbourne. She worries about entering a competitive job market without a master’s degree, but is reluctant to pursue further study because of the cost.
She is hoping to build a routine where she can budget for all her expenses and remove some of the worries that come with the cost of rent and groceries, but as a casual worker, it is difficult to get the hours and the consistency.
“Ideally I’d like to be able to save money for the future, but that’s just not possible right now,” says Evans.
For McDougall, working part-time while studying isn’t providing enough money to keep up with rising costs, and when his job ends in May he worries about finding new employment. He also finds it difficult to strike a balance between budgeting for necessities and spending on social activities.
“It’s difficult to maintain paying rent and wanting to keep up a social lifestyle,” he says.
Cheddar managing director Helen Hay says it’s clear that while younger Australians are concerned by the cost of living, they “still want to get out and enjoy life”, including spending on dining out, health and wellness, attending live events and pursuing hobbies.
This is a sacrifice McDougall and many other young Australians are willing to make, as they try to budget and make financial plans without forgoing lifestyle spending.
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